Minister Murphy approves Irish Water Strategic Funding Plan 2019-2024
Eoghan Murphy, T.D., Minister for Housing, Planning and Local Government yesterday (8th November 2018) announced his approval of the Irish Water Strategic Funding Plan 2019-2024, without modification.
“I have approved the Irish Water Strategic Funding Plan 2019-2024, without modification, which sets out Irish Water’s multi-annual strategic funding requirement of €11bn to 2024, comprised of a €6.1bn investment in infrastructure and assets and €4.9bn in operating costs. This is a significant multi-billion euro investment programme which will ensure the continued operation, repair and upgrading of our country’s water and wastewater infrastructure to support social and economic development across the State and continued care of our water environment.”
The Water Services (No. 2) Act 2013 (as inserted by section 19 of the Water Services Act 2017) provides that Irish Water prepare a multi-annual Strategic Funding Plan (SFP) which sets out the capital and operational costs expected to be incurred over a multiannual period and how these costs fall to be recovered. Under the provisions of the Act, the Strategic Funding Plan is to outline the costs and revenue requirements associated with the implementation of the relevant Water Services Strategic Plan (WSSP), the first of which was published in 2015 and the Water Services Policy Statement published by the Minister, the first of which was published on 21 May 2018.
The Plan is in line with the new funding model for Irish Water arising from the report of the Joint Oireachtas Committee on the Future Funding of Irish Water (April 2017) and provides as much funding certainty as possible, in the absence of domestic water charges, and aligns with the cost recovery aspects of the EU Water Framework Directive. The funding requirement will be met through a combination of non-domestic revenue, excess usage charges, government subvention, non-domestic borrowings and capital contributions.
Importantly, the Plan will now be subject to economic regulatory review by the Commission for Regulation of Utilities (CRU) as part of its third regulatory control period 2020-2024. In line with its statutory functions, the CRU will consider the efficiency of investment proposals, together with submissions from Irish Water on it detailed investment plans, for the third regulatory control period 2020-2024 (with the CRU’s allowed revenue determination for Irish Water feeding into annual Exchequer decisions on spending in respect of those years).
The Minister approved the Plan in its current form, without modification, considering that it is reasonable for Irish Water to plan for delivery in accordance with the Strategic Funding Plan profile. The Minister intends that his Department will revisit the profile of proposed capital spending under the Plan during 2021, in the light of the CRU decision for its third regulatory cycle and actual progression of capital investment in the early years of the Plan, particularly in relation to major projects.